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Car / Bike / 2 Wheeler Loan Interview Questions & Answers - Learning Mode

Car / Bike / 2 Wheeler Loan Interview Questions & Answers - Learning Mode

A car / bike loan is a personal loan that allows the potential buyer to pay the vehicle off in monthly payments instead of having to pay the full price all at once. Essentially, the lender gives you the service of using its money, and in exchange you compensate the lender for its services by paying interest. Most car loans use simple interest, a type of interest of which the interest charge is calculated only on the principal (the amount owed on the loan). A Car / Bike Loan is a personal finance product where the financier provides the borrower with the funds to purchase a vehicle for personal use. The loan is secured against the vehicle, and at the end of the contract the customer retains the full title of the vehicle. A Car Loan can also be known as a Consumer Loan or a Secured Car Loan.

Try Car / Bike / 2 Wheeler Loan Interview Questions & Answers - Exam Mode


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Car / Bike / 2 Wheeler Loan Interview Questions & Answers - Learning Mode
Try Car / Bike / 2 Wheeler Loan Interview Questions & Answers - Exam Mode
Question: What are the major points I should know if i want to go for a pre used car loan?

Answer: Firstly car loan for pre used car for a model which is not being manufactured by the car manufacturer may be hard to get. Similarly if the car you are looking to purchase it way too old, chances of a pre used car loan get reduced significantly. Interest rates of loans offered for used cars are also on an average cost 3-4% more than that for a new car. Also the maximum amount one can expect in a pre used car loan can range from 60 to 75% of the on road price of the car. Source:
Question: Do I get any advantage if I buy a pre used car from a certified seller rather than from the grey market in terms of a loan?

Answer: Yes there are many benefits of buying your second hand car from a certified pre used car seller. Most major automobile manufacturers have set up their own pre used car shops. The first advantage is you can be rest assured of the quality of your purchase. Although banks have their own in house yardsticks to come up with the current price of the car, their pricing is usually similar to what the pre certified car agency quotes. So you can hope to get your loan amount as per the car price and not so Source:
Question: Can one time a car loan to get a cheaper loan or is it a myth?

Answer: The growing competitive car loan market has meant that banks have monthly targets to achieve. Since banks have month end targets, in case the bank is falling short of their target they would rather offer a cheaper deal to the customer rather than watching him go to a rival bank or NBFC. So expect discounted interest rates to relaxed terms and conditions as well as a waiver of loan processing fee in case you time your car loan well. Source:
Question: What is the maximum age of a car to be eligible for a loan against car?

Answer: Banks offer loan against cars for both new cars as well as old cars. You can even avail a loan against car even if you purchased a second hand car. Banks usually do not offer a loan against cars older than 6 years although the final decision lies with your respective bank. Source:
Question: Does SBI offer any scheme for buying a used car?

Answer: SBI does indeed offer a car loan scheme for used car. In fact SBI scheme offers the highest tenure for a pre used car. With the SBI used car loan scheme you can get repayment tenure of 7 years with a loan LTV of 85% of the on road price of the car. The interest rate under the SBI car loan scheme for used cars is calculated on a daily reducing basis. You will however need to pay 15% of the on the road price as margin money includes vehicle registration charges, insurance, one-time road tax and ac Source:
Question: Can you tell me what a car loan with an overdraft facility is?

Answer: Car overdraft loans are just like any other normal car loan but come with an overdraft facility. The overdraft facility allows the loan account to be linked with an overdraft account. Any surplus funds you may have can be parked in this overdraft account. The money parked in this account would be considered to have been repaid for the loan while calculating the interest amount. The interest is therefore calculated on the effective due amount and not the entire amount. The monthly EMI for car loa Source:
Question: I have a car loan running can I still hope to get loan against my car?

Answer: Yes if you have an ongoing car loan even then you can avail the facility of opting for a loan against your car. Various banks have their own way to offer loan against car for existing car loan borrowers. For example some banks offer a higher top up loan amount if you are paying a higher EMI on your car loan. Some other banks deduct the outstanding amount on your car loan and then disburse the new loan. Source:
Question: Can I prepay car loan with no penalty?

Answer: The shrinking resale value of old cars may mean you may want to sell off your car before the loan tenure ends or upgrade to a new car. Unfortunately banks know this fact and have a prepayment penalty charge if you want to pay off your loan before its tenure period. There are some banks like Dena Bank offering zero penalties for car loan prepayment. So check with your bank if it offers a zero penalty for car loan prepayment before finalizing your loan. Source:
Question: I am planning to buy a bike preferably through a two wheeler loan. What is the maximum loan amount I can get?

Answer: Bike loans are easily available today, as it is offered by most banks and NBFCs. You have not mentioned whether you are salaried or self employed as different banks have fixed different margin money requirements for both individuals.
Most banks and Non Banking Financial Companies offer loans for two wheelers for up to 85% of the on road price of the vehicle for salaried individuals. Various banks have fixed a maximum upper limit for the two wheeler loans they offer. The vehicle purchased with Source:
Question: I am seeking to buy a pre used car on loan. I have read that maximum LTV is between 60 to 75% of the car price. Who determines the price of the second hand car?

Answer: Yes you have heard it right. Car loans for pre used cars come with a LTV of 60 to 75% of the car price as determined by the car valuation expert of the concerned bank. For example you are seeking to avail the pre used car loan from Bank X. After you shortlist your car, you will need to inform your concerned bank. The bank will send its official car valuation expert to check the price of the car. Whatever the car valuation expert would conclude as per the car?s condition, its make, model and othe Source:
Question: Is this a good time to buy a car through a car loan or should I wait for interest rates to go down further?

Answer: Banks and non banking financial companies have reduced their car loan interest rates owing to a constant decline in the RBI repo rate. Effectively this is a good time to take any loan including a car loan. So for both new and existing car loan applicants, car loans are now available at cheaper interest rates reducing their monthly loan EMIs. With more banks announcing reduction in their base rates, car loan rates are likely to come down for a large majority of banks and NBFCs. Source:
Question: Are loans easily available for high end bikes like a Ducati for example?

Answer: Most exotic sports bike manufacturers have tied up with banks offering easy bank loans. What?s more these loans are at a lower interest rate than regular 2 wheeler loans. You do not have to give a high down payment as loans are available for up to 70-80% of the bike?s cost. If the bank is happy with your profile and financial track record, a loan of up to 90% of the bike's cost is possible. Source:
Question: How much loan can be availed for a 2-wheeler?

Answer: For a 2 wheeler loan, you can get a maximum of up to 85% of the on road price of vehicle. The interest rate for a large majority of 2 wheeler loans is calculated on a daily reducing basis. Before you request for a 2 wheeler loan, it is important to know that you will need to pay a margin money of around 15% of the on the road price including vehicle registration charges, insurance, one-time road tax. Before taking two wheeler loans, it is advised to compare the rates offered by different banks a Source:
Question: How much money can I get if I opt for a loan against my car?

Answer: The amount of money you can get will depend on your financial history, your car, its make and model along with its age. Banks usually do not offer a loan against cars older than 6-7 years although the final decision lies with your respective bank. As far as the quantum of money goes, if you are a good customer with your bank having a good financial track record and a good credit score, banks will offer you anywhere between 70 to 85% of the current price of your car as determined by the bank. Source:
Question: Does choosing a car model have any influence on car loan interest rates?

Answer: Yes, not many people are aware of the fact that interest rates for car loans differ of various car models. Interest rates for cars in the small and medium category are a tad higher than those in the high end or premium category. Hence make it a point to choose your car make and model wisely as a wrong car selection can mean you end up paying a higher car loan escalating the overall cost of your car purchase. Always compare car loan quotes from multiple lenders before deciding on the loan. Source:
Question: What is the difference between Car Loan and Car Overdraft Loan?

Answer: Car loans are a common financial tool used by people to realize their dream of a car purchase. For new cars, car loans require the borrower to submit various loan related documents with the bank and the bank processes the same depending on the amount of loan, the down payment and credit rating of the borrower.

Car overdraft loans on the other hand are car loans with an overdraft facility. In simple terms the overdraft facility, the loan account is linked with an overdraft account. The int Source:
Question: Is it a good idea to consider a higher down payment for car loan? Would the banks allow such a move?

Answer: Yes it is a very good idea to pay more than the minimum down payment for your car loan. In fact a lot of car loan borrowers commit the mistake of opting to pay only the minimum down payment. This makes the quantum of their loan higher and they end up paying a higher overall cost for the car. Paying a higher down payment than the minimum amount on the other hand makes sure your total loan amount is lower which leads to a lower interest payment each month and a reduced EMI. Banks will not lose any Source:
Question: I had applied for a car loan but recently the bank reduced its repo rate. Will my loan be effective on new lower rates?

Answer: It all depends on which stage your loan application is at the present moment. If you have just applied for the automobile loan and your loan application is under consideration or under process you will get the benefit of the rate cut in the bank base rate. If however your loan has been disburses then you will not get any benefit on the reduced base rate. Source:
Question: How much down payment is generally the norm when opting for a used car loan?

Answer: The down payment for used car loans is usually fixed at 15% of the assessed value of the car as a bare minimum. Depending on the estimated price, the bank decides on the amount of loan. Usually a loan amount of 80% of the on road price of the car as estimated by the expert is approved. Banks and NBFC's deduct a margin money amount for registration, insurance and accessories while assessing the final on road estimated price of the used car. Source:
Question: What is the maximum loan I can get for a used car loan?

Answer: If you are buying a used car, you should be prepared to shell out more money from your pocket upfront. You will at best get a LTV between 60 to 75% of the on road price. Once you shortlist your car, the bank or NBFC will send its valuation expert to evaluate the vehicle. The final loan amount will be 60 to 75% of the final value arrived by the car valuation experts. The age and the model of the car play a major role in approval or rejection for a pre used car loan as cars older than 5 years are Source:


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